Optionals IAS Mains Economics: Questions 147 - 156 of 216

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Question 147

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Appeared in Year: 2010 (IEcoS)

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Essay▾

Explain Alfred Weber՚s theory of industrial location.

Explanation

  • The basis of this theory is the study of general factors, which makes an industry to shift towards various different geographical regions. In this theory, Weber has taken into consideration factors that will decide the actual setting up of an industry in a particular area.
    • Weber՚s Problems: Weber faced many serious problems. He wanted to find out wh…

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Question 148

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Appeared in Year: 2010 (IEcoS)

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Write a short note on entry barriers.

Explanation

Barriers to entry are the economic term describing the existence of high start-up costs or other obstacles that prevent the new competitors from entering an industry or area of business easily.

  • Barriers to entry will benefit existing firms because they protect their revenues and profits. Common barriers to entry include special tax benefits or incen…

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Question 149

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Appeared in Year: 2018 (IEcoS)

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Explain the concepts of existence value and user value of environment.

Explanation

Existence values depicts the fact that individual will assign importance to the existence of natural beauty if though it may not be of any economic use to them.

  • The existence of forests, sea costs, parks, etc are of utmost importance to the individuals but they may never use it in their lifetime.
  • Non-use values Existence values the value placed by …

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Question 150

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Appeared in Year: 2018 (IEcoS)

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Explain the theory of contestable markets? (2012)

Explanation

Contestable market theory is one of the economic concepts, which refer to a market in which there are only a few companies that because of the threat of entry of new firms, behave in a competitive manner.

  • It assumes that even in a monopoly or oligopoly, the existing companies will behave in a competitive manner when there is a lack of barriers, such…

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Question 151

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Appeared in Year: 2018 (IEcoS)

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What is the Lerner՚s index and what is its value for perfectly competitive markets?

Explanation

In perfect competition, price is equal to the marginal cost of the product at the equilibrium position. This equilibrium position ensures maximum social welfare or optimum allocation of resources.

  • When competition is less than pure or perfect, the demand curve faced by a firm will slope downward and marginal revenue curve will be lying below it.
  • Cons…

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Question 152

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Appeared in Year: 2012 (IEcoS)

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“The burden of present public debt is shifted to future generations.” Examine this statement.

Explanation

A very important question which has created controversy in the recent years is whether the public debt imposes burden on the future generation.

  • The traditional argument is that burden of public debt is shifted to the future generation.
  • The future generation pays the interest and the principal.
  • It further states that taxes are used to finance a project…

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Question 153

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Appeared in Year: 2018 (IEcoS)

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Distinguish between Imperative and Indicative planning.

Explanation

In imperative planning, the economic decisions are made through a central planning authority rather than the market economy. The decisions regarding what, how and for whom to produce are determined by the central authority in accordance with the pre-determined plans and targets.

  • The administrative control and regulation from the central planning aut…

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Question 154

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Appeared in Year: 2012 (IEcoS)

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Write a short note on New Orthodoxy of public debt.

Explanation

James M. Buchanan in his Public Principle of Public Debt, he holds the view that the debt operations result in the shifting of burden from present to future generations.

  • He challenged the validity of Pigou՚s thesis on the ground that the concept of burden should be interpreted in terms of individual attitudes towards their economic welfare and not i…

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Question 155

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Appeared in Year: 2012 (IEcoS)

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Write short note on Dose Response Method.

Explanation

Dose response method requires the information on the effect that a change in a particular pollutant will have on the level of an economic activity or a consumer՚s utility.

  • According to OECD, Dose-response method measures the relationship between exposure to pollution as a cause and specific outcomes as an effect. It refers to the damages or producti…

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Question 156

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Appeared in Year: 2018 (IEcoS)

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What do you mean by optimal taxation?

Explanation

  • Optimal taxation depends upon the trade off between efficiency and fairness.
    • A fair tax is one that guarantees a socially desirable distribution of tax burden; an efficient tax is one with a small excess burden.
    • A fair tax is often the one that imposes equal liabilities on people that have the same ability to pay, whereas an efficient tax system is o…

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